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Banks, Court Blame Customers for Negligence as Fraud Cases Rise

Rose Ahebwa has been moving up and down trying to recover Shillings 47 million that mysteriously vanished from her newly opened account in Equity Bank Uganda on December 18, 2022. After engaging various bank officials to recover her money in vain, Ahebwa decided to plead with veteran journalist Aldrine Nsubuga to make her case public to draw the attention of those who could help.

On February 7, 2023, Equity issued a statement assuring the public that they were working on the issue, which went viral on social media, thanks to Nsubuga’s intervention. Several cases reported to financial institutions, in particular, commercial banks and mobile money transfer companies, feature one characteristic; staff at the responsible company showing either inability or a lack of willingness to help.

A similar case was reported last month by a mobile money user in Kampala who lost 2 million Shillings. She was sent moving around branches and the head office without any solution, prompting her to share her dilemma on social media. A day later, the affected company invited her and returned her money. In the case of Ahebwa, she deposited Shillings 47 million into her Equity bank account in December last year.

She received a “customer service” call a few days after opening the account and was asked some questions, which she unsuspectingly answered. A few days later, she went to make a withdrawal but found no money in her account. It was all gone, but 27,000 Shillings. She reported to the police the following day according to the case reference number, though the bank had advised against it and preferred to settle the matter internally. Ahebwa is yet to understand how the money left her account without her knowledge and yet she never registered for internet banking.

According to her, she sought explanations, but from the teller, through to the Branch Manager onto to the head office, “they all avoided to answer the question as to where the money had gone.” Despite reporting the matter to the police a day after the incident, Ahebwa is yet to get any help from the bank officials.

The question she and any other victim of fraud at a bank ask is; if a customer has not withdrawn money, who has access to their account?  Equity has now given her a ray of hope. “We wish to confirm that the incident has been given due attention and is being handled with the seriousness it deserves,” says a statement from Equity. The Bank could not explain how far the process to settle the matter had gone, for confidentiality purposes but said that investigations are part of the process.

“While we cannot divulge customer information, we reassure our customers and the general public that the matter has been noted and due process is being followed to resolve the same. This includes collaborating with the relevant investigative authorities,” reads a statement from the bank.

The bank says that it remains keen on investing in technology “and other safety measures to ensure that the Bank remains a safe and secure place for all our customers’ funds and transactions.” Theft through banks continues to evolve with technology.

Before embracing technology in the early 2000s, one of the common ways to steal money included inserting counterfeit money during an over-the-counter transaction. Later, with the introduction of the Automated Teller Machine (ATM), fraudsters learned to tamper with the machine and the next customer would fail to insert their ATM Card, surrendering the process to a nearby ‘fellow client’ for help who would be watching keenly.

During the ‘help’, the fraudster masters the code and tactfully switches the cards, and goes away, telling the victim that either the machine or the card has a problem.

Immediately the fraud withdraws the money from the next ATM.

“Withdrawing money from an ATM is a quick and convenient way to access your money, especially during a cash emergency however, they can also be targets for criminal activity. It’s important to be cautious, never accept help from strangers and report suspicious activity immediately,” says the Uganda Bankers Association, UBA.    

Now, the banking industry says the main source of the problem is a failure of clients to safely keep their personal banking codes and the electronic equipment that they use to transact with the bank or to keep confidential information. These include mobile phones, laptops or computers, SIM cards, or access to a banking app.

Equity also warns customers against using public Wi-Fi to do online or mobile banking, as it is easy for a fraudster to use the same network to access another user’s data.

The bankers also warn against engaging fraudsters on the phone or internet platforms, and to hang up as soon as the caller is suspected to be one.  

“In the event that you notice suspicious activity on your banking platforms or realize that you have lost money to scammers, immediately report to police, alert the bank, change all passwords and log-in information, and gather all documentation regarding the transaction like a mini statement for evidence,” says UBA.

However, these safety tips by the banking industry can be rendered useless when the fraud is an insider job because the account holder will most likely not get any alert until they decide to check their account balances. Such incidences include the cloning of ATM cards by the staff of a company and using the clone to withdraw money, or tampering with the online system by bypassing some security checks and accessing an account without the holder’s knowledge according to professional hacker Mustafa Mugisa.

“We take it upon ourselves to sensitize both our employees and customers using various channels about the risks posed by fraud and also implement systems to guard both our customers and the bank against the negative effects of this deed,” said Centenary bank in a text message.  The last few weeks have seen an online outcry over the loss of money by clients of Equity Kenya.

A UK-based Kenyan lawyer, Bianca Wamu twitted “Polite reminder: If you have money in your Equity Bank Account, please check the balance every 5 seconds. My friend’s mother lost her entire PENSION. She launched a complaint, but nothing has been done. Equity has rude customer care.”

The barrage of related comments saw James Mwangi, the Group’s Chief Executive respond by assuring that all the reported fraud cases are being attended to with the seriousness they deserve. 

“While we cannot divulge customer details/information, we wish to confirm that incidences reported have been given the due attention,” reads his statement in part. He went on to give similar responses to the same Equity Uganda gave on Ahebwa’s incident, including avoiding using Wi-Fi when transacting online and sharing electronic gadgets.

One case that has not been explained especially where the money ends up, is attributed to a system failure, not necessarily theft. However, similar clients have been left frustrated by the inability of the lack of willingness by bank officials to help. 

On June 2022, one Tituryebwa Julius made an online payment to the Law Development Centre, LDC, and used his mobile phone number to accept a payment initiated by DFCU Bank. “Upon completion of the payment, mu LDC payment status indicated ‘pending’, meaning LDC did not receive the money,” he says.

Airtel Money confirmed the transfer of 201,500 Shillings to DFCU, but the branch manager assured that the payment would be effected the same day. Having tried all means including walking to head office in Nakasero, Kampala, and getting no help, Tituryebwa gave up.

Two days later he got more money and this time paid through Housing Finance Bank and immediately, he was notified by LDC that payment had been made. He says he was surprised to get a call from DFCU informing him how the payment he had made through the bank had been completed through Housing Finance, with no further explanation.

In 2020, the head of the High Court Commercial Division Justice Stephen Mubiru ruled that in case of fraud through electronic banking, the blame goes to the customer for being negligent. Aida Atiku had sued Centenary Bank when she allegedly found her account empty, with a balance of 50 million Shillings all gone without her knowledge.

Justice Mubiru stated that “it is the customer’s responsibility to keep their banking information, user IDs, passwords and PIN numbers confidential. Account take-overs happen when fraudsters acquire the login details of a legitimate user and then use the account as their own.”

According to Atiku, she opened the account in 2020 where she deposited  56.3 million Shillings, and soon after withdrew  700,000 Shillings. She says that eight months later she returned to the bank to withdraw the rest of the money but there was no money in the account. The bank staff informed her that someone had over time been withdrawing money in different sums using the Cente Mobile platform, yet, according to her, she had never applied for the online banking service.

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